Correlation Between Rave Restaurant and Jacobs Solutions
Can any of the company-specific risk be diversified away by investing in both Rave Restaurant and Jacobs Solutions at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Rave Restaurant and Jacobs Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rave Restaurant Group and Jacobs Solutions, you can compare the effects of market volatilities on Rave Restaurant and Jacobs Solutions and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Rave Restaurant with a short position of Jacobs Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rave Restaurant and Jacobs Solutions.
Diversification Opportunities for Rave Restaurant and Jacobs Solutions
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Rave and Jacobs is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Rave Restaurant Group and Jacobs Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacobs Solutions and Rave Restaurant is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Rave Restaurant Group are associated (or correlated) with Jacobs Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacobs Solutions has no effect on the direction of Rave Restaurant i.e., Rave Restaurant and Jacobs Solutions go up and down completely randomly.
Pair Corralation between Rave Restaurant and Jacobs Solutions
Given the investment horizon of 90 days Rave Restaurant Group is expected to generate 2.37 times more return on investment than Jacobs Solutions. However, Rave Restaurant is 2.37 times more volatile than Jacobs Solutions. It trades about 0.06 of its potential returns per unit of risk. Jacobs Solutions is currently generating about 0.06 per unit of risk. If you would invest 159.00 in Rave Restaurant Group on September 5, 2024 and sell it today you would earn a total of 145.00 from holding Rave Restaurant Group or generate 91.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rave Restaurant Group vs. Jacobs Solutions
Performance |
| Timeline |
| Rave Restaurant Group |
| Jacobs Solutions |
Rave Restaurant and Jacobs Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rave Restaurant and Jacobs Solutions
The main advantage of trading using opposite Rave Restaurant and Jacobs Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rave Restaurant position performs unexpectedly, Jacobs Solutions can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Jacobs Solutions will offset losses from the drop in Jacobs Solutions' long position.| Rave Restaurant vs. Ark Restaurants Corp | Rave Restaurant vs. One Group Hospitality | Rave Restaurant vs. Flanigans Enterprises | Rave Restaurant vs. Noble Romans |
| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |